Edited from: “DuPont 10k annual report 2009 and 2010 annual review”
“As we entered 2009, the world’s economies remained in the grip of the global recession and worldwide financial crisis. At DuPont, we responded by focusing on what we could control. We put in place directives aimed at maximising margins, dramatically reducing spending, zero-basing capital expenditures and aggressively reducing working capital,” says chair of the board and chief executive officer, Ellen Kullman.
“Our actions positioned us well for 2010, ready to meet the challenge of delivering earnings growth despite declining income from pharmaceuticals such as Cozaar and Hyzaar,” continues Kullman.
DuPont says it will benefit in 2010 from “anticipated gradual recovery” in developed markets and a more rapid acceleration in emerging markets. The company expects to grow faster than market rates over the next few years due to its “unique” portfolio, global positioning, and the combined impact of its productivity and business management.
In addition to the company’s strategy for growth are four significant global trends:
Increasing food production
DuPont says that estimates are that the world will have to nearly double food production by 2050. The company will work with farmers around the world to significantly increase corn and soybean yields over the next decade with seeds that are higher yielding, more drought tolerant, more nitrogen-use efficient and more resistant to insects and disease.
Other DuPont solutions include herbicides, insecticides and fungicides, nutrition and health products, and packaging materials that keep food safe and fresh, longer.
Decreasing dependency on fossil fuels
DuPont says it is well positioned to address the rising demand for secure, environmentally sustainable and affordable energy sources.
“We have products that help improve energy efficiency in building construction and provide lightweight solutions in the transportation industries, and a growing suite of solutions across alternative energy applications including novel biofuel technology and photovoltaic materials,” says Kullman.
Protecting people, assets and the environment
DuPont will continue to develop new capabilities for products like Kevlar and Nomex advanced fibres which are recognised globally for applications in protective apparel for law enforcement, first responders and the military.
Growth in emerging markets
Through innovation, DuPont is partnering with local customers in China, India, Brazil and other emerging economies.
“We expect our strategy of putting decision making responsibility and development capability closer to our customers in emerging markets will enable DuPont to exceed trend-line growth in these markets in 2010 and achieve $12bn in revenue by 2012,” says Kullman.
DuPont will continue to increase its global presence by meeting challenges, including increasing food production, increasing renewable sources for energy and raw materials, and providing greater safety and protection for life, assets, and the environment.
The company has differentiated targets for growth in these strategic areas including future funding of capital expenditures, research and development, and marketing programmes.
DuPont states that by aggressively pursuing top line growth opportunities in key markets and improving productivity, the company says that it has met or surpassed its 2009 financial goals for earnings per share (EPS), cash flow, and working capital reductions.
In addition, the company announced a three-year 2010-2012 plan which includes $1bn fixed cost productivity actions, $1bn working capital productivity programmes, and compound annual growth targets of 10% for sales and 20% for EPS through 2012.
Sales in emerging markets, which include China, India, and the countries located in Latin America, Eastern and Central Europe, Middle East, Africa, and southeast Asia, are targeted to grow at a 14% compound annual rate from 2009 to 2012.
The company has reaffirmed its commitment to maintain a strong balance sheet and to return excess cash to shareholders unless there is a compelling opportunity to invest for growth.
Looking ahead for 2010, the company’s earnings outlook is a range of $2.15 to $2.45 per share, with expected 10% sales growth, reflecting anticipated continued global economic recovery, increasing industrial production, and, on average, a weaker US dollar versus 2009.
Favourable global agriculture markets and competitive conditions are expected to support continued sales and earnings growth for the agriculture and nutrition segment, partly offset by anticipated higher commodities costs. Demand for the company’s polymer, chemical, material, and electronic product lines is expected to increase moderately versus the depressed levels of 2009.
Earnings from hypertension drugs Cozaar and Hyzaar are expected to decline about $690m to $740m pre-tax, reflecting expiration of certain patents for these pharmaceuticals. The company expects approximately $410m higher pre-tax non-cash pension costs.
This is expected to be partially offset by $160m lower pre-tax costs resulting from a change in other employee-related benefits. The company plans to continue a differential level of support for businesses expected to have above-average growth rates and margins.
For 2010, the company has set targets for capital expenditures of about $1.6bn and fixed cost productivity programmes totalling about $400m.
“In 2010, we will continue the momentum generated from last year’s aggressive cost-cutting and cash-generating actions,” say Kullman.
“We remain confident in our performance outlook for 2010, based on improving economic conditions coupled with well-positioned and streamlined businesses,” concludes Kullman.
Please see US DuPont sees 12% polymers growth in 2010 amid new apps, markets, DuPont sees market stabilisation and early signs of recovery and INSIGHT: DuPont innovating a way out of the crisis or go to ICIS news.
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Financial highlights: DuPont, year ended 31 December
Sales ($ m)
R&D ($ m)
Net Profit ($ m)
Total Assets ($ m)
Diluted earnings per share ($)
Number of Employees
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DuPont sees itself as a company delivering science-based solutions. Its science and technology expertise ranges from high-performance materials through to agricultural products in areas such as food and nutrition, health care, apparel, safety and security, construction, electronics and transportation. DuPont was founded in 1802 primarily as an explosives company. Its focus then turned to chemicals, materials and energy.
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